Semtech (SMTC) Reiterates Q3 Outlook

Semtech Corporation (Nasdaq: SMTC), a high-performance semiconductor, IoT systems and cloud connectivity service provider, today provided comments on its third fiscal quarter 2024 outlook.

“Based on quarter-to-date performance and expectations through the end of the current quarter, we are pleased to reaffirm our outlook for net sales in the range of $190.0 million to $210.0 million and non-GAAP diluted loss per share in the range of $0.22 to $0.09, previously provided on September 13, 2023,” said Paul H. Pickle, Semtech’s president and chief executive officer. “We remain proactive in evaluating our business, including operational refinements and capital structure changes, to provide long-term benefit to our shareholders as economic conditions evolve.”

Non-GAAP Financial Measure

This release includes a presentation of forward-looking non-GAAP diluted loss per share. Management believes that the presentation of this non-GAAP measure provides useful information to investors regarding the Company’s financial condition and results of operations. This non-GAAP financial measure is adjusted to exclude the following items:

• Share-based compensation
• Intangible amortization
• Transaction and integration related costs or recoveries (including costs associated with the acquisition of Sierra Wireless)
• Restructuring and other reserves, including cumulative other reserves associated with historical activity including environmental and pension
• Litigation costs or dispute settlement charges or recoveries
• Gain on sale of business
• Equity method income or loss
• Investment gains, losses, reserves and impairments, including interest income from debt investment
• Write-off of deferred financing costs and debt discount
• Goodwill impairment
• Amortization of inventory step-up

Such items are either operating expenses that would not otherwise have been incurred by the Company in the normal course of the Company’s business operations, or are not reflective of the Company’s core results over time. These excluded items may include recurring as well as non-recurring items, and no inference should be made that all of these adjustments, charges, costs or expenses are unusual, infrequent or non-recurring. For example: certain restructuring and integration-related expenses (which consist of employee termination costs, facility closure or lease termination costs, and contract termination costs) may be considered recurring given the Company’s ongoing efforts to be more cost effective and efficient; certain acquisition and disposition-related adjustments or expenses may be deemed recurring given the Company's regular evaluation of potential transactions and investments; and certain litigation expenses or dispute settlement charges or gains (which may include estimated losses for which the Company may have established a reserve, as well as any actual settlements, judgments, or other resolutions against, or in favor of, the Company related to litigation, arbitration, disputes or similar matters, and insurance recoveries received by the Company related to such matters) may be viewed as recurring given that the Company may from time to time be involved in, and may resolve, litigation, arbitration, disputes, and similar matters.

Notwithstanding that certain adjustments, charges, costs or expenses may be considered recurring, in order to provide meaningful comparisons, the Company believes that it is appropriate to exclude such items because they are not reflective of the Company's core results and tend to vary based on timing, frequency and magnitude.

Information about forward-looking non-GAAP diluted loss per share disclosed in this release is provided to enhance the user's overall understanding of the Company's comparable financial performance between periods. In addition, the Company’s management generally excludes the items noted above when managing and evaluating the performance of the business.

Semtech is unable to include a reconciliation of the forward-looking non-GAAP diluted loss per share to the corresponding GAAP financial measure, GAAP net (loss) income, as this is not available without unreasonable effort due to the high variability and low visibility with respect to the impact of transaction, integration and restructuring expenses, share-based awards and the amortization of acquisition-related intangible assets that are excluded from the non-GAAP measure. The Company expects the variability of the above charges to have a potentially significant impact on the corresponding GAAP financial measure.

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